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Nigeria is left licking her wounds once
more with the planned delisting of Nigeria Bottling Company, bottlers
of Coca Cola and other soft drinks, from the Nigerian Stock Exchange.

NBC recently announced that its parent
company, Coca-Cola Hellenic Bottling Company South Africa, intends to
invest up to N45 billion in Nigeria between 2011 and 2013 in order to
expand its commercial base. Consequently, the proposed transaction will
involve the cancellation of part of the share capital of NBC, so that
it would become a wholly-owned subsidiary of Coca-Cola Hellenic. The
proposal includes a cash payment of naira 43.00 per NBC share as
consideration to the minority shareholders.

However, some market operators have
raised concerns over the absence of policies that ensure multinationals
have part of their equity percentage listed on the bourse for the
benefit of local investors.

“I’ve seen in some jurisdictions, Ghana
for instance, when the government wants to licence a multinational
company, they will tell them the necessity of ensuring that part of the
equity percentage of the company will be thrown to the home-based
investors within a particular period,” Sunny Nwosu, the national
coordinator of the Independent Shareholders Association of Nigeria,
said.

Mr. Nwosu asked that the Nigerian
government should also have a means of persuading multinational
companies in the telecommunication, oil and gas sectors to be listed on
the Exchange.

“A company like MTN, Shell, and Chevron
and other exploration companies should also be persuaded to list their
companies. Their ordinary 10 percent equity will deepen the market and
give a lot to local investors,” he said.

Mr. Nwosu blamed Nigerian directors in those companies for their greed.

“I blame the directors because they
could not advice the foreigners on how to ensure that the power of
Nigeria spending is shared through profits to Nigerians,” he said.

He added that “any value that a company
like MTN is having today is a value created by majority of Nigerians;
not a few of them as directors. If Nigerians today say they are not
going to patronise MTN, definitely the business will collapse. MTN has
been selling its shares in dollars to eliminate common Nigerians from
participating.”

The same sentiment was expressed by
Boniface Okezie, the national chairman of the Progressive Shareholders
Association of Nigeria, who claimed investors are not happy with the
delisting plan “since the company is still making money because
Nigerians are the consumer of their products. Nigeria is the main
destination for investment in Africa.”

Mr. Okezie said the company’s attitude
shows that “it doesn’t want to be regulated again,” adding that “if the
environment is not conducive for them, they can wind up and leave the
country.”

Investors should be concerned

In the meantime, finance analysts said
the capital market community should “worry” about the delisting plan
because the “move would naturally translate into a reduction of market
capitalisation.”

Analysts at Proshare Nigeria, an
investment advisory firm, said the immediate effect is the “blow on the
image of the NSE as an avenue for raising capital and trading in the
securities of listed companies.”

They added that “The NSE and the
Securities and Exchange Commission (SEC) should be worried that our
market is perceived as having failed in both important criteria of
successful markets.”

It remains unclear as at press time,
SEC plan of action on the delisting plan. Several attempts to get
comments from Lanre Oloyi, spokesperson of the SEC, and Simon Obidairo,
personal assistant to Arunma Oteh, SEC’s director general, went
unsuccessful as their phones were switched off.

But Wole Tokede, the Exchange
spokesperson, said NBC plan “does not have anything to do with loss of
confidence in the capital market.” Mr. Tokede said that the Coca-Cola
producing company has its reasons for delisting, adding that it is a
choice of a company to either be listed on the Exchange platform or
not.

Meanwhile, the chairman, House of
Representatives committee on capital market, Umar Jubril, in a
telephone interview, promised that the committee “will sit down with
the managements of the NSE and SEC to deliberate on the development” to
ensure shareholders’ interests are protected.

He said the committee is thinking in
the direction of wooing more multinationals to be listed in the
Exchange. “We’ll try to lure MTN for instance, NNPC, and other
companies that Nigerians can benefit from.”

Jim Lafferty, NBC managing director, in
a statement, said the new investment plan of NBC is going to make
Nigeria “one of the most important emerging economies in the world
during the next decade.”

The NBC, one the companies in the AG
Leventis Group, was established in Nigeria in 1951 and formed the
foundation of Coca-Cola Hellenic, the largest Coca-Cola bottling group
in the world. It was listed on the NSE on the 12th November, 1973.</